Crude Prices Rise Due to Saudi Pipeline Closure Amid Regional Tensions
Oil prices surged as Saudi Arabia closed its East-West pipeline following attacks by Houthi rebels, raising concerns about tighter global oil supplies. The closure disrupted a key route that bypasses the Strait of Hormuz and carries 7 million barrels per day (bpd). This move comes amid ongoing regional tensions, including increased drone strikes on Russian energy infrastructure from Ukraine and potential escalation in Israel's conflict with Iran-backed groups. Saudi Arabia’s crude production fell to its lowest level since 1990 at 6.238 million bpd in August, while exports dropped to a nine-year low of about 3 million bpd. The Houthi rebels have also captured the strategic Red Sea port city of Mokha and are positioned closer to targeting shipping lanes through Bab al-Mandab Strait. Meanwhile, global oil markets face further tightening as Vitol Group estimates that Middle Eastern crude exports have been reduced by about 2 million bpd. In Russia, drone attacks from Ukraine have significantly curbed production and processing rates.
Topics: global supply concerns Houthi rebels oil prices pipeline shutdown Saudi Arabia